What just happened? On the same day that Tesla revealed it is finally selling the $35,000 Model 3, the company also made a surprising announcement: it is moving to an online-only sales model. As a result, most of the EV maker’s stores will close over the “next few months.”
Alongside news that the $35,000 version of its mid-range Model 3 sedan can finally be ordered, Tesla said it will be shifting to an online sales strategy. CEO Elon Musk explained that this would see “many” stores closed and a “reduction in retail headcount.”
Only a small number of stores in “high-traffic locations” will remain open as galleries, showcases and Tesla information centers, where customers can learn about the company and buy merchandise. Tesla never specified how many of its employees would be laid off as a result of the closures. “It is a hard decision but I think it’s the right decision for the future,” said Musk.
Tesla added that the operational savings it would make from the move would allow it sell the cheapest version of the Model 3 while remaining financially stable. Additionally, it will be increasing its investment in its customer service system, with the aim of providing same-day or even same-hour service to Tesla owners. Most of this will involve Tesla coming to the customer, rather than the other way around.
Back in January, Tesla announced that it was cutting seven percent of its workforce as it looked to retain profitability following a “challenging” year. It appears that this decision could have been preparing the company for the move to online-only sales.